On 25 November 2019, the SRA introduced its new Standards and Regulations. Its aim was to simplify the rules applying to the profession and to provide more freedom and flexibility in a modern, legal services market.
Although there are now two Codes of Conduct, one for individuals and one for firms, both are much shorter than the previous Code. Gone are the long “Outcomes” and “Indicative Behaviours”. Firms and solicitors can decide for themselves whether their conduct has complied with the Codes, using their own judgment.
Whilst shorter and more user friendly Codes are welcome, in practice this may mean that there is more room for errors of judgment as to whether the Codes have, in fact, been complied with as the requirements are less prescriptive.
Similarly the SRA’s Principles, upon which the Regulator relies in the course of disciplinary proceedings, have been shortened. There are now seven Principles, four which relate to the way in which firms run their businesses and the standard of service they deliver having been removed. These Principles are now replicated in the Code of Conduct for Firms.
However, a new Principle has been introduced, namely one which requires solicitors to act “honestly”. This is distinct from Principle 5, the requirement to act with “integrity”. This reflects the struggle the SDT has had in dealing with the two concepts of honesty and integrity. Before these changes, the SRA would simply make a stand alone accusation of dishonesty against the solicitors whilst making specific allegations relating to breaches of the Principles. The practical effect of the change is therefore probably minimal.
The SRA’s focus on personal conduct, often outside the workplace, has been reflected in its enforcement policy, which has also been amended. This makes it easier for the SRA to pursue non-qualified staff working within law firms, as well as solicitors, for conduct which they deem to be unbefitting of the profession. We expect to see more prosecutions for sexual harassment and dishonesty as a result.
The duty to self-report misconduct remains, but now individuals who witness misconduct are only required to notify their firm’s COLP, unless they reasonably believe that the COLP will not make a self-report, in which case they are required to contact the SRA themselves. Our advice remains that self-reports should be made by firms as early as possible, usually on a no-names basis, before the outcome of any internal investigation.
The Code of Conduct for Firms places particular emphasis on supervision and employee well- being. Where individuals are prosecuted for misconduct, we expect to see firms face action for failing to identify that misconduct during supervision processes or for failing to address well- being issues.
The new regime is clearer in that firms’ and individuals’ duties have been separated, but they are no less stringent than they were before. These requirements, coupled with the changes to the Solicitors Disciplinary Tribunal’s procedural rules, will mean that we see a further increase in prosecutions against both firms and solicitors. The main reason for this is the lowering of the standard of proof adopted by the SDT from the criminal “beyond reasonable doubt” to the civil “balance of probabilities” standard. This is consistent with other similar tribunals, but it ignores the already very high conviction rate in matters involving solicitors.
It is critical that those firms who have not already taken action ensure that they are familiar with these changes and to promote a culture of compliance, supervision and well-being in order to mitigate against the risk of scrutiny by the regulator.
